GREAVESCOT.NS WACC - Weighted Average Cost of Capital

The WACC of Greaves Cotton Ltd (GREAVESCOT.NS) is 15.7%.

The Cost of Equity of Greaves Cotton Ltd (GREAVESCOT.NS) is 15.85%.

The Cost of Debt of Greaves Cotton Ltd (GREAVESCOT.NS) is 11.10%.

	Range	Selected
Cost of equity	14.40% - 17.30%	15.85%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	7.80% - 14.40%	11.10%
WACC	14.3% - 17.1%	15.7%

WACC

GREAVESCOT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	17.30%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.80%	14.40%

After-tax WACC	14.3%	17.1%


Selected WACC	15.7%

GREAVESCOT.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for GREAVESCOT.NS:

cost_of_equity (15.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.